ACCUMULATING PERIPHERALS


Greenspan: we can’t afford McCain’s tax cuts by mattsteinglass
September 14, 2008, 3:23 pm
Filed under: Economics, President

I realize everyone is completely obsessed with hunting moose, banning books, supporting and then disavowing support for bridges to nowhere, etc., but I’m really surprised that no one seems to be focusing much on the fact that Alan Greenspan said on Bloomberg TV Friday that the US can’t afford John McCain’s tax cuts.

Former Federal Reserve Chairman Alan Greenspan said the country can’t afford $3.3 trillion of tax cuts proposed by Republican presidential nominee John McCain without corresponding spending reductions.

Greenspan, a lifelong Republican and longtime friend of McCain, said today on Bloomberg Television’s “Political Capital With Al Hunt” that “I’m not in favor of financing tax cuts with borrowed money.”

McCain has said he would balance the cost of most of his tax cuts with budget reductions, while providing few details beyond eliminating earmarks and other pork-barrel spending, which have totaled about $171 billion since 2001. Democratic nominee Barack Obama is proposing fewer tax cuts and more ambitious spending programs.

I was watching this while running at the gym, and it was pretty specific and clear. This is not some quote lifted out of context. Al Hunt asked Greenspan: McCain is proposing $3.3 trillion in further tax cuts. Can we afford that? And Greenspan said, no. Not without corresponding spending cuts. Since everybody knows there’s no physical way to cut $3.3 trillion out of the budget barring radical slashing of Medicare, Medicaid, Social Security and/or defense spending, this is a pretty clear statement. Not that we needed Alan Greenspan to tell us this, but the credibility of the messenger carries a lot of weight.

Obviously the Bloomberg tag is incorrect: Barack Obama is proposing a net tax increase. But taxes will rise only on people making more than $150,000 a year; everybody else gets much bigger breaks than under the McCain plan.

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